A power of attorney is an instrument that gives a person legal authority to step into your shoes and act on your behalf for various purposes. Those purposes may include: entering contracts, conducting property or business transactions, or managing your financial accounts.

A power of attorney for personal care and medical decisions is called an advance healthcare directive in California. This is also known as a living will in other states.

The amount of authority you confer upon person through a power of attorney, in other words, what you allow that person to do on your behalf, may be limited (or special) or unlimited (or general). A general power of attorney gives a person the unlimited authority to act on your behalf for any all types of transactions. A special power of attorney is limited. You grant only certain restrictive authority to a person for specific purposes. The limit you place on the authority may be with respect to time, particular assets, or certain actions. The purpose of a power of attorney for most people, and why it is an integral part of the estate planning process, is so that your affairs can continue to be managed in the event you become mentally and/or physically unable to do so yourself. Or, in the case of a healthcare directive, to attend to doctors and help make medical decisions for you. These instruments are effective only during your lives and terminate upon you death.